In a written statement to Parliament, the Secretary of State for Business and Trade, Jonathan Reynolds, has confirmed that the Government will take forward proposals to increase the monetary size thresholds for UK companies.
In March 2024, the Conservative government announced that the company monetary size thresholds would be raised by approximately 50% for financial years starting on or after 1 October 2024, as follows:
| Turnover | Balance sheet total | |||
| Current | Proposed | Current | Proposed | |
| Micro entity | £632,000 | £1m | £316,000 | £500,000 |
| Small | £10.2m | £15m | £5.1m | £7.5m |
| Medium | £36m | £54m | £18m | £27m |
| Large | >£36m | >£54m | >£18m | >£27m |
Following the General Election, there were doubts as to whether, and when, the changes would be implemented.
It's been confirmed that the Government will lay legislation by the end of the year to increase the thresholds. It is expected that the increased thresholds will come into force on 6 April 2025.
The statement made to Parliament indicates that the changes will benefit up to 132,000 companies that will move to a smaller size category, with lighter-touch accounting and reporting requirements.
As part of the changes, 'redundant reporting requirements' will be removed and technical fixes made to the UK’s audit framework. In total, the Government expects that £240m per year will be saved by companies.
Useful guides on this topic
What is a small or medium-sized company?
What is an SME? What size is a small company under the Companies Act? What size is a micro company? What size are Medium and Large companies?
Small Company accounts: Companies House requirements
These filing obligations are due to change in 2024 under the Economic Crime and Corporate Transparency Act 2023. Up until then, the 2016 filing obligations for small and micro-entities apply. They have existed since 2016 and the withdrawal of the FRSSE and introduction of new reporting standards FRS101, FRS102 and FRS105.
Audit thresholds
What are the audit thresholds? Which entities are exempt from audit?
External links
Written statement, Jonathan Reynolds MP: The UK’s Modern Industrial Strategy
Department for Business and Trade: Non-financial reporting review: impact assessment (revised)
